Cakelicious: A Successful Startup with a Loyal Customer Base

Cakelicious is a startup founded by Fatema Barodawala and Duriya Barodawala, two women from Kolkata who share a passion for baking cakes. Fatema, who used to be a home baker, turned her passion into a profession after leaving an abusive relationship during the COVID-19 pandemic. Along with her mother, Duriya, who is a head chef, they started making cakes and selling them from their home kitchen.

The founders of Cakelicious noticed that customers are often dissatisfied with cakes that get smudged during delivery. To address this issue, they came up with the idea of cake tubs - cakes that come in a box, which ensures that the cake stays fresh and intact during delivery. They offer their cake tubs in 30 different flavors, including unique options like mango Mondays and walnut Wednesdays. Their cakes are available in three different sizes and are sold through various channels like their own website, quick-commerce platforms like Zomato, and their retail store.

VISION OF THE STARTUP

The vision of Cakelicious is to make cake a part of everyday sweet cravings, rather than just a part of celebrations. The founders, Fatema Barodawala and Duriya Barodawala, believe that cake is a dessert that can be enjoyed any time and not just on special occasions. They want to make their cakes accessible to everyone and bring a sense of joy to people's daily lives through their product.

To achieve this vision, Cakelicious is committed to using only fresh and preservative-free ingredients in their cakes. They believe that this sets them apart from other cake makers and has helped them attract health-conscious customers who are looking for fresh and natural products.

In addition, Cakelicious has made their cakes available through multiple channels, including their own website, quick-commerce platforms like Zomato, and their retail store. They have also expanded their operations to include two cloud kitchens to cater to their growing customer base.

BUSINESS MODEL & TARGET MARKET

The business model of Cakelicious revolves around their unique product, the cake tubs, which come in 30 different flavors and three different sizes. The cake tubs are designed to ensure that the cakes stay fresh and intact during delivery, which has helped them address a common customer complaint.

Cakelicious sells their products through various channels, including their own website, quick-commerce platforms like Zomato, and their retail store. They have also expanded their operations to include two cloud kitchens, which allows them to cater to a growing customer base. Their cakes are made using fresh and preservative-free ingredients, which has helped them attract health-conscious customers who are looking for natural and healthy products.

The target market of Cakelicious is diverse, ranging from health-conscious customers to those looking for unique and delicious desserts. Their cakes are popular among people who want to celebrate special occasions like birthdays, anniversaries, and weddings. However, their vision of making cake a part of everyday sweet cravings means that they are also targeting customers who want to indulge in a sweet treat on a regular basis.

The startup has been successful in attracting a loyal customer base, which includes people of all ages and backgrounds. They have also been able to expand their reach through various marketing strategies, including social media marketing, influencer marketing, and word-of-mouth recommendations.

SALES AND REVENUE

In July, their sales were 2 lakhs, which increased to 2.5 lakhs in August and 3 lakhs in September. This suggests that their business is expanding and they are attracting more customers.

The best-selling cake at Cakelicious is sold at ?350, with a making cost of ?140. This means that their gross profit is 60%, and their net margin is 40%. Last month, the startup had a profit of 80000, which indicates that they are profitable and their business is sustainable.

In terms of sales channels, 40% of Cakelicious' total sales come from Instagram ads, while 30% come from Zomato, 20% come from their retail store, and 10% come from their own website. This suggests that their online marketing strategy is effective in attracting customers, and their physical retail store is also contributing significantly to their sales.

The high repeat rate of 80% also suggests that Cakelicious has been successful in building a loyal customer base. This is a positive indicator for the long-term sustainability of the business, as it is much easier to retain existing customers than to attract new ones.

JOURNEY IN SHARK TANKS INDIA

Cakelicious appeared on Shark Tanks India and made an ask of 25 lakhs for 5% equity at the valuation of 5 crores. After negotiations with the investors, the final deal was closed with Amit at 25 lakhs for 20% equity of the company.

During the negotiation process, Amit initially gave an offer for 15 lakhs at 15% equity and 10 lakhs debt at no interest. However, the owners of Cakelicious gave a counteroffer of 25 lakhs at 15% equity, which was rejected by Amit. Amit then gave a counteroffer of 25 lakhs at 20% equity, which was also rejected by the owners.

Finally, the owners and Amit reached a deal where Amit invested 25 lakhs for 20% equity of the company. This suggests that the owners were able to negotiate a better deal for themselves, as they were able to secure the funding they needed while giving up a larger portion of the equity.